Down 45% From Highs, DoorDash Stock Finally Looks Like Decent Value

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doordash stock (NYSE:DASH) is down nearly 20% over the past month and remains down more than 45% from its early November highs. So what’s driving the current sell-off? Although the fundamental picture for DoorDash stock hasn’t changed much, with the company posting better than expected revenue growth in the recent quarter, we think the stock is being impacted by some technical factors. For example, investors are likely to turn largely from pandemic winners to value stocks as the Federal Reserve plans several rate hikes through 2022 to combat rising inflation. DoorDash, which trades at around 9x 2021 revenue and hasn’t turned profitable yet, is likely to be impacted by this change.

So is DoorDash stock buying at current levels around $132 per share? While we were largely bearish on DoorDash stock by 2021, we think the stock may be worth a look for investors looking to play in the delivery market after a massive correction recently. There are a number of developments that could propel DoorDash stock higher in the near term. First, Covid-19 cases in the US have been rising to an all-time high of more than 700,000 cases on average over the past week, and this could lead to more people ordering instead of going to restaurants to help demand for DoorDash’s services. Is. We can also see a partial impact of this in DoorDash’s Q4 results due in February, the full impact of which is likely to be seen in Q1 FY’22. In addition, DoorDash’s expansion plans are also gaining traction following its acquisition of fast-growing European food delivery company Vault, which enables it to enter 22 new markets. DoorDash is also pushing into other delivery segments, such as groceries and retail consumer products, which could be large markets. That being said, despite the large jump in demand through the pandemic, we still have some concerns about the company’s lack of unit economics and profitability. We value the stock at approximately $130 per share, which is in line with its current market price. View our analysis DoorDash Valuation: expensive or cheap? For more information on evaluating DoorDash.

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View our dashboard DoorDash Revenue For an overview of DoorDash’s business model and how its revenue is likely to trend, click here.

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Below you’ll find our previous coverage of DoorDash stock where you can track our outlook over time.

[11/11/2021] Up 8% over the past month, what’s next for DoorDash stock?

doordash stock (NYSE:DASH) has gained about 4% over the past week, outperforming the S&P 500, which remained nearly flat over the same period. The stock is also up nearly 8% over the past month compared to the S&P 500, up 7% over the same period. That gain is largely driven by DoorDash’s announcement that it will acquire international food delivery platform Volt — which has operations in 23 countries — in an $8.1 billion all-stock deal. The deal could help accelerate DoorDash’s international expansion and drive revenue growth as growth in wider distribution volumes in the US moves toward calm with the easing of COVID-19 restrictions.

So is DASH stock likely to rise further in the coming weeks and months or is there a higher chance of a correction? According to the Trefis Machine Learning Engine, which analyzes historical stock price movements, DASH stock has only a 46% chance of growth in the next month (21 trading days). View our analysis DoorDash stock likely to rise for more information.

Day five: Dash 4%, versus the S&P 500 -0.2%; best performing market

(32% chance of occurrence)

  • doordash stock Rose 4% in the five-day trading period ended 11/10/2021 compared to the broader market (S&P500), which declined by -0.2% over the same period.
  • A change of 4% or more in five trading days has a 32% chance of an event, which has happened 73 times out of 226 in the past year.

Day 10: DASH 7.7%, versus the S&P 500 2.1%; best performing market

(28% chance of occurrence)

  • doordash stock rose 7.7% Compared to the broader market (S&P500), it gained 2.1% over the past ten trading days (two weeks).
  • A change of 7.7% or more in ten trading days has a 28% chance of occurrence, which has happened 62 out of 221 times in the past year.

Twenty One Days: DASH 7.7%, vs. S&P 500 6.9%; best performing market

(38% chance of occurrence)

  • doordash stock rose 7.7% In the last twenty one trading days (about a month), compared to the broader market (S&P500), which increased by 6.9%.
  • A change of 7.7% or more in twenty-one business days has a 38% chance of occurrence, which has happened 79 times out of 210 in the past year.

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[9/10/2021] DoorDash stock looks overvalued at $208

doordash stock (NYSE:DASH) is up nearly 10% over the past month, outperforming the S&P 500, which is down about 1% over the same period. The stock is also up nearly 50% year-over-year. The recent rally was driven by a few factors. First, the rise in COVID-19 cases in the US, due to the highly contagious Delta version of the virus, will delay a return to office plans and that could bode well for stay-at-home stocks like DoorDash. In addition, the company posted 83% year-on-year growth in Q2 with sales of nearly $1.2 billion in the quarter, despite easing some Covid-19 guidelines in the quarter. Posted stronger than expected revenue in 2021, giving investors confidence that demand could pick up. Reasonably well post even covid.

That said, despite the optimism, we think DoorDash stock is pretty high at its current market price of $208 per share. The stock trades at 15x forward revenue, almost like a software-type business with thick margins and high operating leverage. Sure, DoorDash recently posted breakneck revenue growth, with sales up 3x last year and projected to grow more than 45% this year, but growth will slow significantly in 2022. Moreover, DoorDash has not been able to turn a profit despite posting huge growth. Its losses were also higher than expected compared to the previous year and in the second quarter of 2021. This worries us about the unit Arthashastra of Doordarshan. DoorDash’s biggest costs relate to its distribution partners and that number is variable, growing in proportion to the number of orders, giving the company little profit. Since the restaurant industry with which DoorDash works is inherently low-margin, customers will ultimately have to bear the impact of higher fees to drive profits. We value the stock at $130 per share, approximately 9x forward revenue. View our analysis DoorDash Valuation: expensive or cheap? For more information on evaluating DoorDash.

[7/12/2021] What’s up with DoorDash stock?

doordash stock (NYSE:DASH) has gained about 25% over the past month, far better than the S&P 500, which is up nearly 3% over the same period. There are a few factors driving the profit. Sentiment for DoorDash’s stock has picked up since it published its Q1 results in early May, when the company raised its full-year revenue guidance, making investors more optimistic about its pandemic prospects. Analysts have also raised their price projections for DoorDash stock, as the company focuses on expanding into new geographies and beyond its core food delivery vertical with new partnership announcements for groceries and other items. Concerns about the post-IPO lockup expiration have also eased, as it is now more than six months since the company went public.

However, despite recent optimism, we think DoorDash stock looks overvalued at current levels of around $180 per share. The stock currently trades at a high 14x forward revenue, more like a software-type business with thicker operating margins and higher operating leverage. In comparison, ride-hailing and food delivery major Uber trades at about 6x projected revenue, while Just Eat Takeaway.com, a food-delivery services company that was recently acquired through the merger of European players Takeaway and Just Eat Trades Almost 4x trailing from was built on. Pro-Forma Revenue. While the higher multiplier versus distribution is partly justified by DoorDash’s breakout revenue growth (over 45% growth projected for 2021), we have concerns about DoorDash’s unit economics. DoorDash’s biggest costs relate to its distribution partners and that number is variable, growing in proportion to the number of orders, giving the company little profit. Since the restaurant industry with which DoorDash works is inherently low-margin, customers will ultimately have to bear the impact of higher fees to drive profits. We value the stock at a little less than $120 per share, approximately 9x forward revenue. View our analysis DoorDash Valuation: expensive or cheap? For more information on evaluating DoorDash.

[5/24/2021] Investors optimistic about DoorDash’s post-pandemic prospects PO Q1

by ten The stock was seen as a classic pandemic drama. The company saw more than 3x growth in revenue last year as people increasingly opted for food delivery services as they took shelter at home through Covid-19. Investors were worried that DoorDash’s business would face heat as the economy reopens as people return to sit-down restaurants. However, these fears were probably wrong. On its Q1 2021 earnings call, Doordarshan actually raised its guidance for its gross order value…

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